Not worried about new debt, dismisses idea of capital increase

(ANSA) - Turin, January 10 - After sealing a deal to take
full control of Chrysler, the Fiat Group will soon be given a
brand new name, Fiat Group Chief Executive Sergio Marchionne
said in an interview published Friday.
The Italian automaker announced the $4.35-billion agreement
on New Year's Day, after more than a year of negotiations with
VEBA, a healthcare trust associated with the United Auto Workers
union, to acquire the remaining 41.46% share of Chrysler.

Asked when the merger of the Italian and American
automotive giants are set to take place, Marchionne told Italian
newspaper La Repubblica, "I hope immediately, with the approval
of Chrysler's 1.9-billion-euro dividend".

The new company will be listed "where there is easier
access to capital. The market is more fluid in New York, but the
board of directors will decide," Marchionne added.

Under the deal, Fiat and Chrysler will pay out $3.65
billion in cash to VEBA, sharing the cost, while Chrysler has
agreed to paying over the next three years an additional $700
million.

The Fiat chief said he is "absolutely not" worried about
the added debt the buyout will bring to the group.
He dismissed the idea of a capital increase because "it
would destroy value," but said convertible bonds "could be a
suitable measure".
The location of company headquarters, he said, will be
decided "on the basis of of the stock market choice" but also
has "a symbolic, emotional value".

Marchionne also assured the newspaper that all workers
currently furloughed in Italy will be put back on assembly lines
under the Fiat Group's new Italian strategy "to exit the mass
market", where Italy's longstanding economic hardship has
contributed to shrinking consumption and withering car sales,
and to invest in "high-quality products", like its Alfa Romeo
line.

The Cassino plant "is the best adapted for the relaunch of
Alfa Romeo (both) structurally and for its productive capacity,"
Marchionne said.
But Marchionne also added somewhat mysteriously that in
"ghost factory sheds, camouflaged throughout Italy, teams of our
men are preparing new Alfa Romeo models that we will announce in
April".